October 3, 2022 3.55 pm This story is over 22 months old

Scunthorpe-based British Steel asks for £500m government aid

Raising questions about job security

The Chinese owner of British Steel has reportedly told ministers that two blast furnaces in Scunthorpe are unlikely to be viable without hundreds of millions of pounds of government aid.

Jingye Group, which bought the company out of insolvency in 2020, has asked the government for a rescue package of up to £500 million to keep open its vast steel works in Northern Lincolnshire, according to the Financial Times.

British Steel employs around 4,000 people with many more working for companies in the supply chain. One insider said that Jingye was prepared to make thousands of people redundant if ministers rejected its request, according to Sky News.

BBC Look North said the company refused to confirm or deny the reports about asking for government aid, but it told them: “Like most other companies we’re facing a significant challenge because of the economic slowdown, surging inflation, and exceptionally high energy and carbon prices.

“We welcome the recent announcement by the UK government to reduce energy costs for businesses and remain in dialogue with officials to ensure we compete on a level playing field with our global competitors.”

The Financial Times also reports that that company warned it is losing about £1 million a day, and the support it is seeking includes around £100 million to offset the soaring cost of carbon permits.

It is understood that representatives of British Steel have met business secretary Jacob Rees-Mogg twice in the past fortnight to discuss the need for aid.